Derivados de Tipo de Cambio

  • Hedging products as alternatives to Exchange Insurance

    Custom-designed to fit the needs of our customers

  • Exchange rate derivatives are MiFID products. It is compulsory for all related documentation to be completed before contracting can occur. They are subject to EMIR regulation.

    Advantages of Exchange Rate Derivatives

    Exchange rate derivatives are alternatives to Forex insurance that are designed and custom-made for our customer' needs.

    For the contracting of any exchange rate derived from is necessary that you have set up a line of derivatives and signed a CMOF (Financial Operations Skeleton Contract).

    The most common products are:

    • American Forex Insurance: the client acquires the obligation to buy or sell a currency at a certain price on a certain date determined at the time the contract is signed, regardless of the evolution of the currency prior to the maturity date of the operation, with the particularity that early disposal will always be at the same price.
    • Forward Plus: the client acquires the right to buy or sell a currency on a future fixed date and at a pre-established exchange rate, a right that only becomes an obligation if the currency pair reaches an activating barrier level established at the time of contracting.
    • Tunnel: the client limits their exchange rate exposure to a pre-established band at the time of contracting.
    • Exchange Insurance with Deactivating Limit: the client acquires the right and obligation to buy or sell a currency at a certain price and on a future date, on the condition that the operation will disappear if, at any time between the date of contracting and maturity, the market spot rate reaches the deactivating barrier level established at the time of contracting.
    • Accumulator: the client acquires both the right and the obligation to buy or sell a currency on a specific future date and at an predetermined exchange rate, although the amount to be bought or sold is conditioned by the evolution of the exchange rate during the lifetime of the operation. For this reason a degree of leverage and a calendar of periodic observations are established.

    Forex insurance is an MIFID product classified as complex and an essential requisite for its contracting is the completion of all the related documentation (Classification, Generic Pre-contractual Information, Specific Pre-contractual Information and Appropriateness Test, if the client is classified as a retailer).

    As it is an MiFID product classified as complex, it is not suitable for all customers. They are also subject to the EMIR regulations.

    If interested, please contact your manager at Bankia to discuss you needs, so that our specialists can design the best option for you.

    If you would like to know more about these products, view these presentations: